16 Tex. Admin. Code § 33.40 - General Provisions
(a) This rule
applies to conduct surety bonds, performance bonds, excise tax bonds, and bonds
for alternating brewery proprietorships and contract brewing arrangements
("bonds").
(b) Submission of Bond
with Application.
(1) When required by the
Alcoholic Beverage Code to submit a bond, an applicant for an original or
renewal license or permit shall submit with its license or permit application
the required bond or alternative form of surety, as authorized under this
section.
(2) Failure to submit the
necessary bond or alternative form of surety in proper form will result in
denial of the application.
(c) A bond required under the Alcoholic
Beverage Code must be executed only on forms prescribed by the TABC with the
licensee or permittee as principal, a qualified surety company doing business
in this state as surety, and the state as payee.
(d) All bonds shall be payable in Travis
County.
(e) A license or permit
holder shall obtain, submit, and maintain a separate bond for each license or
permit it holds.
(f) A licensee or
permittee required to furnish a bond under this section may furnish, in lieu of
all or part of the amount of the bond required, one or more certificates of
deposit or savings accounts assigned to the state or one or more letters of
credit. If an assignment of a certificate of deposit, savings account, or
letter of credit is furnished in lieu of a bond, the executive director or
their designee shall keep it in the agency's possession. Interest earned on a
certificate of deposit or savings account is not subject to the assignment and
remains the property of the owner of the certificate of deposit or savings
account.
(g) A certificate of
deposit or savings account furnished in lieu of a bond by a licensee or
permittee must be assigned to the state, in a manner approved by the executive
director or their designee, to secure payment to the state.
(h) A letter of credit furnished in lieu of a
bond by a licensee or permittee must be on a form approved by the executive
director or their designee and contain any conditions required by the executive
director to secure payment to the state.
(i) Qualifications of Surety Company.
(1) A surety company, to qualify to provide
bonds under this subchapter, must be licensed by this state and in "good
standing" with the State Board of Insurance, Comptroller of Public Accounts,
Secretary of State, and any other regulatory agencies with jurisdiction over
its affairs.
(2) In addition to the
requirements of Alcoholic Beverage Code §§
11.11 and
61.13, a bank
or credit union must have a physical facility in this state to accept cash
deposits, make cash advances to customers and carry out day-to-day operations
within this state.
(j)
Each bond required by this subchapter must cover the permit or license period
and must be maintained until it is released or forfeited or, if it is a bond
required by §33.45(b), until it is terminated by the surety pursuant to
Alcoholic Beverage Code §
11.71.
(k) Release of Surety.
(1) Upon expiration of the license or permit,
its voluntary cancellation, or upon the applicant's subsequent approval for
exemption from the surety requirement, the licensee or permittee may request
the release and return of the security supporting their license or permit.
(2) The release of the surety will
not be unreasonably withheld; however, the surety company, bank, or credit
union is not released from its obligation until it receives written notice of
the release from the commission.
(3) The executive director may not release a
surety bond until the surety company has paid and discharged in full all of its
liabilities on the bond to the state as of the date of cancellation.
(l) General Provisions regarding
Bond Forfeiture.
(1) When a permit or license
is revoked, the commission shall notify the permittee or licensee in writing of
its intent to seek forfeiture of the bond.
(2) Upon entry of a final order against the
permittee or licensee or upon waiver of hearing by the permittee or licensee,
the commission shall notify the surety company to remit to the state the full
amount of the surety required within ten days after notification.
(m) For purposes of this
subchapter, an order issued pursuant to an agreement of the parties in which
the permittee or licensee waives its right to a hearing is a final adjudication
of the violation that is the subject of the agreement and order.
(n) Violations of the Code or commission
rules by the legal entity in the name of which a bond or other surety is held
or by any of its officers, directors, or partners are counted toward and may
result in cancelation, forfeiture, or exemption from the requirement to post a
bond or other surety.
(o) In a
joint venture, regardless of the type of legal entity formed, prior violations
by any participant in the joint venture will disqualify the joint venture from
exemption from the requirement to post a bond or other surety.
(p) Neither the bondholder nor any officer,
director, or partner of a bondholding entity may be granted a new license or
permit until a forfeited bond or other surety is paid.
(q) The commission may seek forfeiture of a
bond due to cancellation of the license or permit for any reason, including
cancellation for multiple violations of Alcoholic Beverage Code §§
102.31 and
102.32.
Notes
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